Triumph of the family man

Rupert Murdoch's second son has now been put in charge of running News Corp's European and Asian operations, cementing his status as likely successor to his father. Not bad for a publicity-shy, home-loving type

BSkyB boss James Murdoch spent Tuesday evening at Claridge's, chatting to journalists and businessmen at a Sunday Times Christmas party. 'He didn't drink, and he left early, as he often does,' says a fellow guest who knows him well. He returned to his west London home before his two young children went to bed.

Wearing one of his trademark tailored suits, but no tie, Murdoch exuded an air of studied insouciance, but he must have known then what the rest of the world would only discover 48 hours later. On Thursday evening, it emerged that Murdoch was stepping down as chief executive at Sky (he will remain in overall control, taking over from his father Rupert as non-executive chairman) to take up a newly created post at its parent company News Corp, where he will run the group's European and Asian operations. He takes responsibility for the Times, the Sun and the News of The World, the group's powerful stable of British newspapers, a move that makes him the most powerful opinion-former in the country.

For Murdoch-watchers, the message was clear. At 34, the fourth of Rupert Murdoch's six children, once a rebellious figure who sported an eyebrow stud and ran an underground hip-hop record label, is one step away from taking the reins of the £34bn company founded by his father. 'There is no doubt now that James is Rupert's heir apparent,' says a former News Corp executive. The announcement sent shockwaves through the media world. The company's assets include film studio 20th Century Fox, cable network Fox News, internet site MySpace and dozens of newspapers around the world, and politicians who fear the influence the Murdoch empire wields will be eager to learn more about the man who is likely to succeed him.

Since arriving in London in 2003 to run Sky, Murdoch has studiously avoided the limelight, aware that the spotlight could easily fall on a photogenic member of the Murdoch family who was born, in the words of one former News Corp executive, 'not with a silver spoon in his mouth, but with a platinum canteen in his gob'.

A Sky insider claims that Murdoch Jr told his PR adviser: 'You will be a success in this job when the papers refer to me as "the reclusive James Murdoch".' Another former executive praises him for 'not being filmed coming out of the Ivy or on the red carpet'. Unlike his older brother Lachlan, who liked to hang out with reporters when he ran the New York Post, News Corp's American tabloid, James is the embodiment of the modern executive, rising early to go to the gym and boasting a black belt in karate.

But despite his smooth persona, he still shares some common Murdoch traits. 'He thinks the Brits are sniffy about his family and their achievements,' says one former News Corp executive, although colleagues insist he has mellowed since taking the top job at Sky. He is well-liked by staff there, making himself 'visible, if not always approachable', according to one former executive, and taking good-natured banter about his permanent tan with good grace, and he appears to have won a fierce battle within the junior ranks of the Murdoch clan to win the favour of the family patriarch.

Murdoch Sr has spent the last decade trying to ensure the business he built stays in the family, handing his children senior roles in a bid to discover which of them had the qualities to inherit his mantle as the world's most powerful media mogul.

James's two elder siblings from Rupert's second marriage, to Anna Murdoch, Elisabeth and Lachlan, failed the test, deciding to step back from corporate life to pursue their own interests, but James has stayed the course, and is likely to be rewarded with the top job.

It didn't always look like it would work out that way. A bookish teenager regarded as the smartest of the Murdoch brood, James endured an awkward adolescence in the public eye and was famously photographed asleep on a sofa at a press conference while working as a 15-year-old intern at his father's old paper, the Sydney Mirror, a picture the rival Sydney Morning Herald gleefully ran on its front page the next day.

Born in London and raised in New York, he went to Harvard, but chose an unconventional subject, studying film and making animated movies. He dropped out to set up Rawkus Records with friends, before his father enticed him into the family business, offering him the chance to run internet businesses at a time when the world's big media groups were first flirting with the online world.

His big break came at Star TV, News Corp's Asian satellite business, and he was parachuted into the top job at its sister company Sky in 2003 amid much controversy and accusations of nepotism. He won over his critics in the City by hitting ambitious targets, increasing the number of Sky subscribers by more than one million, but he also eschewed his father's abrasive approach, saying early on that the company would be 'a partner not a pariah' to its rivals.

During his tenure he bet the future of the company on broadband, believing Sky had to embrace new technologies that could supersede satellite television. Despite fears he had overpaid for Easynet, it looks as if he has been proved right and he went on to demonstrate a ruthless streak his father would have been proud of, mounting a daring dawn raid on ITV to secure a controversial 17.9 per cent stake in the company to prevent it falling into the hands of Virgin Media. That proved he possessed courage as well as guile.

His public appearances are limited to high-powered industry conferences and he prefers to spend his evenings at home. Matthew Freud, married to his older sister Elisabeth, is part of his social circle, but he spends most of his time with his immediate family, including his American wife Kathryn Hufschmid, who works for the Clinton Climate Initiative, a charitable foundation set up by former President Clinton in 2006. Murdoch's own politics are by no means liberal, however. 'He is a free marketer,' says a Sky source, even if, unlike Murdoch Sr, he rarely shares his views in public. 'I don't comment on politics,' he told the Financial Times last month.

'The difference between James and his dad is that he won't court politicians,' says a Sky source. 'Rupert loves meddling, and he's uproariously indiscreet at times, often for his own amusement.'

Murdoch Jr has socialised with George Osborne, dining at the shadow chancellor's home, but is believed to be unimpressed with David Cameron, who has been courting the powerful Murdoch press with little success since he became Tory leader. James now runs those papers and he may find that many politicians, including the Prime Minister, begin to beat a path to his door.

His elevation was part of a wide-ranging reshuffle at News Corp, which also saw a new editor, James Harding, installed at the Times, while his predecessor at the paper, Robert Thomson, has been placed in charge of the Wall Street Journal, which the company acquired for $5bn in the summer. The management reshuffle has prompted speculation that Murdoch Sr, 76, may finally be preparing to step down as chairman of the company, which is quoted on the New York stock exchange but effectively controlled by the Murdoch family through a number of trusts. When he does so, he is likely to nominate James as his successor, although his appointment would have to be approved by shareholders, and many believe the company could be split up once Rupert retires.

'News Corp is very much one man's creation and it will likely die with him,' says Andrew Neil, who forged a close relationship with Murdoch Sr when he edited the Sunday Times. 'The non-Murdoch shareholders, which include some of the world's biggest financial institutions, will see more value in breaking up the company than keeping its disparate parts together so that a Murdoch can fulfil his - or her - inheritance.'

Others question whether, when the times comes, James would want the top job. 'The really interesting thing about him is that although he's incredibly bright - in the top 0.01 per cent - I still think he could stop and do something completely different one day,' says a former News Corporation executive. 'There is still something a little bit rebellious about him.' But if he does want it, he will be among the strongest candidates, regardless of his surname.

'Nobody can help the family they're born into and James doesn't need to work as hard as he does,' says a former News Corp executive. 'If you're the son of the world's most powerful man, you'll end up a drug addict or extremely driven, and in James's case it's the latter.'

He may have grown up in the court of 'The Sun king' but James Murdoch is unlikely to be eclipsed by anyone, not even his father.

The Murdoch lowdown

Born James Murdoch, 13 December 1972 in London. The third child of Rupert and Anna Murdoch. Married Kathryn Hufschmid in 2000. Two children: Anneka, four, and Walter, two.

Worst of times Photographed after nodding off at a press conference while working as an intern, aged 15, for one of his father's papers. The picture appeared on the front page of a rival Australian newspaper.

Best of times Becoming his father's heir apparent last week, after being promoted from chief executive officer of Sky to chairman and chief executive of Europe and Asia at News Corporation.

What he says 'I'm the chief executive and my relationship with him will be just like that any chief executive will have with a chairman and major shareholder.' Talking about his relationship with his father, after he had become chief executive of BSkyB in 2003.

What others say 'James is a talented and proven executive. He has transformed Sky.' Rupert Murdoch